Bridging the Strategic Gap in Large Organizations

Middle and lower management in large organizations often challenge the strategic decisions of the top management in the fear of compromising own interests. Ineffective communication, lack of strategic consensus and information overload during strategy formulation result in ineffective strategy implementation due to middle management resistance, inertia and shadow organization. To bridge the strategic gap it is essential that organizational culture, organizational structure and management processes are aligned.

Strategy Formulation

Strategy formulation deems a consistent commitment to the existing competitive market realities in order to assess existing opportunities and proceed to necessary changes. To that end, strategy formulation involves change because the organization needs to undergo a transition period in order to absorb the changes. Besides, strategy formulation is closely related to the individual mental maps of top management that is responsible for creating the strategy.

Strategy Implementation

Strategy implementation integrates both the quantitative features of strategy formulation including facts and figures, market analysis, and opportunity assessment, but also the qualitative aspects of the organization reflected on the cognitive behaviours of the people who implement the strategy. Because of the differences in the cognitive behaviours, only 10% of the crafted strategies are successful implemented.

Strategic Gap

In the environment of a large organization, the result of individualistic behaviours both in strategy formulation and strategy implementation creates a strategic gap, which needs to be bridged so that the organization can function effectively. A supportive organizational culture is required where structures, remunerations, and management processes are clear and organizational integration is present.

Large organizations typically operate in a dynamic and constantly changing environment characterized by fierce competition and high concentration. Such competitive organizations need primarily clear and effective communication channels as components of the strategy formulation in order to ensure successful organizational initiatives deriving from top managers.

Top managers of large organizations are responsible for the creation of a supportive organizational climate that can increase employee satisfaction. Yet, considering that different roles determine different perspectives at different managerial levels, it is not surprising that conflicting views arise regarding the need or the importance of a strategy. Top managers have own value systems affecting their feelings of confidence in their subordinates. Therefore, the extent to which middle and/or lower managers are involved in the strategic decision making process is subject to the individual mental maps and perceptions of top management. Top managers do not see people, they see business units and they assess performance based on quantitative rather than qualitative measures. This is the nature of top management, especially in large organizations.

How to Bridge the Strategic Gap

Strategy formulation and strategy implementation involve emotionality, which means more or less intense, long-lasting and unfailing feelings, depending on organizational culture, but also on individual mental maps.

Top and middle management need to be aligned for the soft transition from strategy formulation to strategy implementation. To achieve strategic consensus, large organizations need autonomous, confident, reliable and trustworthy managers, who are ever-present. Most importantly the organization needs accurate and unfailing guidelines, superior quality of strategic conversations and feedback opportunities. These characteristics portray effective decision making.

Effective teamwork is perceived as a tool to overcome organizational tension. Being a two-way process, teamwork involves a defined purpose, strategic commitment, strong team culture and team integration. In most large organizations people look for individual gains and it is rare to encounter collective effort for collective gains. This possibly explains why systems crash after a certain period of time and organizations collapse. Without teamwork there is no quality. In order to achieve this quality, large organizations should stress more on forming the organization into a large team divided into sub-teams approaching the same goal by different aspect.

In conclusion, no organizational structure per se guarantees success. We would expect that the more the middle and/or lower managers are involved in the strategic decision making, the more successful the strategy implementation would be. Surprisingly, in the presence of informal procedures, and own, highly politicized interests, managers defend the opportunities they consider valuable, formulating or implementing the strategies they consider required. However, to bridge the strategic gap ad implement the strategy effectively it is essential that organizational culture, organizational structure and management processes are aligned. Then, strategic consensus will follow.

Sources:

http://www.allbusiness.com/human-resources/468545-1.html

http://www.favaneves.org/arquivos/cohenjournalofbusiness.pdf

http://www.eurofound.europa.eu/ewco/reports/TN0507TR01/TN0507TR01.pdf